Analyst Predicts Employee Turnover will Damage Snap Stock

A market analyst group has downgraded Snap Inc.’s target stock price due to worries surrounding the amount of employee turnover it has seen in recent times.

Brian Wieser is senior research analyst for Pivotal Research Group. He feels the social media company may need to give away stock to important employees as incentive to keep them.

It was revealed last month that Snap employees received stock rather than cash for their Christmas bonuses, for the second successive year.

According to Markets Insider, Wieser wrote: “Concerns we have long held around employee churn are playing out. Significant additional stock grants to key employees may be necessary despite their diluting effects.”

As a result, he dropped his rating from ‘buy’ to ‘hold’, and cut the overall target price from $8 to $6. Snap Inc. stock had been trading as low as $4.99 just before the new year.

Imran Khan stepped down as Chief Strategy Officer last September. He had received shares valued at $637 million in January 2017, just a few days before the company went public.

Despite a large number of millennials abandoning Snapchat Stories in favour of Instagram and WhatsApp, dating apps still see value in it as an advertising platform.

Dating brands reportedly spent 12 times as much on UK Snapchat marketing in Q3 2018, compared to Q1.

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